Law Firm Partner Screening: Growing Trend of Cautious Recruitment in Legal Sector
In the bustling legal scene of London, US law firms are offering substantial pay packages to attract top talent, contributing to the surge in the hiring market. This trend underscores the importance of making the right choices when it comes to lateral partner hires.
Alex Carruthers, founding partner at Hughes Fowler Carruthers, emphasises the significance of assessing a potential lateral hire's skills and cultural fit. He stresses that a good hire should not only excel in their area of law but also be exceptional at business development.
The Solicitors Regulation Authority (SRA) in the City has issued numerous warnings and guidance to lawyers on workplace culture, sexual misconduct, wellbeing, and employers' duties. This underscores the need for law firms to be vigilant in their hiring processes.
Firms are seeking more than reassurance; they want insight into potential partner firms before investing. This includes understanding the lateral's existing clients, reputation, business development skills, and ethical record. Comprehensive background checks are essential to avoid importing liabilities that could harm the firm’s reputation or expose it to legal risks.
A good cultural fit is crucial for a smooth integration. Firms prioritise how well the lateral partner's style, values, and work approach align with the existing firm culture. Comprehensive onboarding, mentorship, and internal communication strategies support this process and help align expectations across the firm.
Law firms also work closely with marketing and business development teams to promote brand consistency and leverage the lateral’s market position without risking reputational damage. The aim is to ensure that the lateral partner expands the firm’s client base and revenue.
The stakes are high due to potential reputational, cultural, and commercial consequences. Proper due diligence is considered crucial, as a bad partner hire can potentially lead to a scandal. Nick Woolf, partner at Woolf&Co, states that relying on luck or gut instinct for lateral hires is no longer acceptable, and proper due diligence is necessary for survival.
The competitive legal landscape requires firms to look beyond the CV and thoroughly understand the inner workings of potential partner firms before making a hire. Persistent concerns around bullying and inappropriate behaviour in the legal sector underscore the need for firms to ask the right questions and speak to the right people.
In 2024, 546 partner moves were recorded in the legal market, according to Edwards Gibson's annual report. This trend has been increasing year-on-year since 2022. Notable moves include Neel Sachdev, a prominent legal name in deal-making, who was poached by US firm Paul Weiss in 2023.
However, the hiring process is not without its pitfalls. Neil Gerrard, a lawyer at Dechert, is an example of a rogue lawyer who caused significant reputational harm and litigation damages to a law firm. This underscores the need for ongoing monitoring and governance post-hiring, to maintain compliance with regulatory requirements and internal firm policies, thus preempting potential issues that could escalate into scandals.
In sum, City law firms approach lateral partner hiring strategically, combining due diligence on professional and ethical background, cultural and team fit assessments, support for business development, and ongoing oversight to ensure a successful and scandal-free partnership.
Investing in a lateral partner requires not only assessing their legal skills and cultural fit, but also understanding their financial acumen and business development strategies, given the competitive legal landscape. In light of the ongoing emphasis on regulatory compliance and avoiding potential scandals, comprehensive due diligence and ongoing monitoring post-hiring are essential elements of the partner hiring process.
